I have been very happy with my Samsung YP-R0 for the 2 years I've had it. It's been my companion on many long journeys and drunken walks home at night.

Recently, however, it has developed a fault and iI am quite devastated.

It does not react at all to the ON button, screen stays black. Connected to the USB cable it get recognized, the screen goes on as usual, boots and goes to the "USB connected" screen. I can transfer files to and from the device. Everything basically seems normal when the USB cable is connected, but otherwise i get nothing at all.

Really hoping that you guys can give me some ideas, like i said, i am quite devastated!

It goes to the screen which displays the "animated" battery charging for a couple of seconds (battery is in blue and about 3/4 charged), then proceeds to the "usb connected" screen (3 bars of battery, but the battery indicator is still, doesn't look like its charging)
If i transfer a file it goes to the "file transfer" screen as normal.
The cable should be fine as I just bought a new one a few weeks ago.

Could it be a hardware failure? I should mention that I was caught by a heavy rain a day prior to the fault, the mp3 was zipped safely inside a bag but some water might have just soaked thru.

According to your description, the battery is already fully charged so I would rather say this is a button problem.
A way to check that: connect the R0 to the PC and wait til the displays turns off. Then press on the power/hold key. If the display turns on, that means it's not a hardware button issue. If the display remains off, that means your power/hold button doesn't work anymore.

According to your description, the battery is already fully charged so I would rather say this is a button problem.
A way to check that: connect the R0 to the PC and wait til the displays turns off. Then press on the power/hold key. If the display turns on, that means it's not a hardware button issue. If the display remains off, that means your power/hold button doesn't work anymore.

IDEA: try to use an external charger i.e. without data lines. R0 will bootup into chargin mode and from here you can turn it on! (If you don't have this charger, you could maybe borrow one from someone )
This check will tell us something more. Next step would be opening the device, checking battery's voltage + cable (if they're broken or not).

I didn't have a chace to try an external charger yet, but I worked out that the ON button still works.

A couple of thing have changed since yesterday

After disconnecting the USB cable the R0 continues to display the charging screen (the one with the battery in the centre of the screen)

if i press the ON button at this point, the screen will flash between the samsung logo and the USB connected screen for about a second, then it will go to the Menu and I can see and play files at this point. The battery icon in the top right is a bit scrambled and has a blue spot over it
Also, the R0 displays all the removed files i've ever put on the device with a greyed out font. I can see them both on the R0 and on the PC
Another thing, ont the PC, instead of the usual icon labeled "YP-R0" i get 2 removable disk icons, labeled "R0" and "Removable disk" (no micro sd card is used with the R0)